Problem: The following formula is used in economics to find an amount of money's future value, $F$, where $P$ is the present value, $r$ is the interest rate, and $t$ is time. $F =P(1+r)^t$ Rearrange the formula to highlight the present value. $P=$
Answer: Formulas may contain multiple variables, along with known numbers and letters that stand for known constants like $\pi$. We can highlight a certain variable in the formula by treating the formula as an equation where we want to solve for that variable. In this case, we need to solve the equation $F =P(1+r)^t$ for $P$. $\begin{aligned} F&=P(1+r)^t \\\\ \dfrac{F}{(1+r)^t}&=P \end{aligned}$ This is the result of rearranging the formula to highlight the present value: $P=\dfrac{F}{(1+r)^t}$